U.S. stocks fell today as retail sales dropped a record 2.8% in October, the latest evidence of how steep the economic downturn is.
The Dow Jones industrial average closed down 337.94 points, or 3.8%, at 8,497.31, finishing off its low for the day of 8,469.99.
The broad market S&P 500 fell 38 points, or 4.2%, ending at 873.29. All numbers are preliminary.
Analysts said the stock market is trying to establish a bottom as the market is caught in a tug of war between attractive valuation and deteriorating economic fundamentals.
Reflecting that uncertainty, the Dow’s nine largest point swings in one session all took place between Sept. 29 and Nov. 13.
Today, the Dow recovered steep early losses and broke into positive territory, reaching 8,923.18 before selling pressure re-emerged in late afternoon trading.
“This is a more severe downturn than what we have seen in prior recessions.
The jobs market is likely to deteriorate further, across the board” said David Resler, chief economist at Nomura Securities International in New York.
The technology sector was broadly lower as Intel Corp. lowered its revenue outlook, sending shares of the chipmaker giant to its lowest since 2002.
Reflecting the weakness in the sector, the Nasdaq composite closed down 79.85 points, or 5%, to 1,516.85.
Energy stocks were pressured by a further decline in crude oil prices.
Financials weakened anew as Neel Kashkari, interim assistant secretary of the Treasury who is overseeing the $700 billion bailout program, told a congressional hearing “We’re going to approve another 20 banks today,” referring to banks that need an injection of capital from the government.
Separately, the Federal Deposit Insurance Corp. posted on its website a plan to help stop foreclosures by guaranteeing 2.2 million home loans under renegotiated terms.
Also, officials of the Group of 20, which represents the main developed and emerging economies, started a two-day meeting in Washington to discuss the global credit crisis.
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